Ciarán Cannon (Galway East, Fine Gael) | Oireachtas source

From 2007 to 2011 the property price crash combined with the loss of more than 250,000 jobs left many of our home owners floundering in the waters of a national mortgage crisis. While 85% of Irish mortgage holders are now successfully making their mortgage repayments, in some cases at significant personal sacrifice, the Government has worked hard since 2011 to throw a very important lifeline to the remaining 15% who have found themselves stranded in those outgoing tides. Thankfully we are now beginning to see the fruits of that work.

Latest figures from the Department of Finance indicate that 71 home owners came out of mortgage arrears every day throughout 2014. Just under 115,000 mortgage accounts were classified as restructured at the end of 2014, which represents an increase of about 30,000 accounts in the course of that year. In the vast majority of cases, real solutions tailored to the needs of borrower are available when genuine engagement takes place between the borrower and the lender. Slowly but surely, these solutions are beginning to work.

Over the past year in my offices in Gort, Loughrea and Athenry, and across east Galway, I have seen a steady decrease in the number of calls I am receiving about mortgage arrears. When people, who are in that difficult place, call, I can refer them to a range of options that are now available to deal with borrowers in distress. The code of conduct on mortgage arrears requires a lender to explore all the options for an alternative repayment arrangement with a co-operating borrower. From my experience of assisting constituents in dealing with lending institutions, the vast majority of them are adhering to this code of conduct and are working with distressed borrowers to find sustainable mortgage solutions.

If it is agreed that a mortgage restructure is not a sustainable solution, alternative arrangements, such as the mortgage-to-rent system, are available to allow a debtor to remain in his or her home in appropriate cases subject to social housing eligibility. None of these solutions would be possible without the large dedicated teams put in place by the lending institutions to engage effectively with distressed borrowers.

The establishment of the Insolvency Service of Ireland was another important milestone in addressing cases of over-indebtedness. While the initial uptake of that service was low, thankfully it is now improving. The Government wants the numbers of people availing of this service to increase, as it is one of the most important parts of the package of solutions available to distressed borrowers. The vast majority, approximately 75%, of proposed solutions are being supported by creditors and lenders.

When people find themselves worrying about mortgage arrears and potential repossession of their home, all of us in this House and members of the media need to be exceptionally careful in the use of language around this challenge. I am not making any accusations about the Members opposite. However, phrases such as "a tsunami of repossessions" or describing 2015 as "the year of repossessions" do nothing to assist anyone. Those soundbites only lead to further and often unnecessary work and distress on the part of home owners.

Professor Seamus Coffey recently carried out an excellent analysis of the mortgage crisis. It indicated that since the crisis started there have been only 1,000 court-held repossessions, which is a remarkably small number of the total number of about 750,000 mortgage holders. In most instances of court action on behalf of the lender, the commencement of that court process is not a signal that a repossession is about to occur. It may often be the case that the process then prompts the borrower to re-engage with the bank to find a lasting and sustainable solution.

More often than not, these cases are adjourned to allow both parties the time to find a sustainable solution and to remove the bank and the borrower from a lengthy legal process. When representatives from AIB appeared before the Joint Committee on Finance and the Public Service recently, they explained clearly that for any of their borrowers to appear in court meant they had not engaged or made any repayments to the bank over a number of years.

It is important to note that 85% of Irish mortgage holders are successfully paying their mortgages and 71 home owners got out of mortgage arrears every day last year. Out of 760,000 mortgage holders in Ireland, only 1,000, or less than 0.25%, have had their homes repossessed in court. Every member of this Government is listening to people's problems on a daily basis. We are acutely aware of the difficulties that families face in dealing with mortgage arrears. That is why we have put in place a suite of policy approaches to assist such people. These approaches are beginning to work. However, these policy approaches cannot be static because they need to evolve as circumstances change. As we speak, the Taoiseach and his officials are refining the policies to make them even more effective in assisting those who urgently need our help. We also need to engage with all of our lending institutions to ensure they continue to treat distressed borrowers in a fair and equitable manner. It is through this range of policy approaches that lasting solutions will be found for all of our borrowers.

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